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CalAttorney2, Lawyer
Category: Real Estate Law
Satisfied Customers: 10244
Experience:  I am a civil litigation attorney with experience representing HOAs, homeowners, businesses and others in real estate matters.
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How do u close a business that has been foreclosed on

Customer Question

how do u close a business that has been foreclosed on
Submitted: 2 years ago.
Category: Real Estate Law
Expert:  CalAttorney2 replied 2 years ago.

Dear Customer,

I am sorry to learn of this situation. Unfortunately the phrase "foreclosed on" is generally not a legal term when used in the context of a business (loans for real property are foreclosed on when the borrower defaults and the title to the property is either transferred back to the lender (less common), or sold at auction or trustee's sale and the proceeds are used to satisfy the lien (more common)).

If your husband's business is bankruptcy (meaning it owes more than it has in assets and income), and has creditors that wish to pursue claims against it, you have a couple of options, you can try winding the business down yourself, or you can hire a bankruptcy attorney to represent the business in a bankruptcy action (which will accomplish the same thing, but is a more formalized mechanism for doing it - his creditors will receive less due to the increased cost of bankruptcy administration, but if they are harassing you, you will get a great deal of protection from the formality of the process).

I would recommend speaking with a local attorney though, if it isn't your business you may be somewhat limited in what you can do legally (depending on how your husband had his business titled he may be the sole proprietor and you must have an attorney represent him if he cannot manage his own affairs).

Winding down a business like this can be done fairly efficiently (I have done a couple of these in similar situations) and it is sometimes possible to salvage a small amount of money for the owner (some creditors will exercise some sympathy, even though they have no legal obligation to do so, and others will realize that their claim is unlikely to be paid in full in any event so they will accept far less than the full dollar amount). Having a lawyer handle this is going to both take a great deal of trouble off of your hands, and possibly help you salvage some equity from the business (more importantly, you will want to minimize any claims that his creditors may try to make against his personal assets).